GOP Should Run against the Power of the Center

Move to the center. That’s the advice Republicans are getting from quarters friendly and otherwise. It seems to make a certain amount of sense. If opinion is arrayed along a single-dimension, left-to-right spectrum and clustered in the middle in a bell-curve pattern, then a party on the right needs only to move a few steps toward the center or just beyond to convert itself from minority to majority status.

But the world is a lot more complicated than that. Opinion is not arrayed on a single dimension, but flies all over the place in two or three or even four dimensions (which is to say it changes over time). New issues crop up, and old issues appear in a different light. Success in politics often comes not from readjusting one’s stand to conform with current opinion but in redefining what is at stake and reframing issues so that you have majorities on your side.

So I think Republicans today should be less interested in moving toward the center and more interested in running against the center. Here I mean a different “center,” not a midpoint on an opinion spectrum, but rather the centralized government institutions being created and strengthened every day. This is a center that is taking over functions fulfilled in a decentralized way by private individuals, firms and markets.

To govern is to choose, as John F. Kennedy said, and those in charge of these new centralized institutions are making choices that inevitably favor some and hurt others.

This center includes the treasury with its $700 billion of Troubled Asset Relief Program funds voted last fall to purchase toxic assets from financial institutions and used instead to quasi-nationalize banks and preserve union benefits for employees and retirees of bankrupt auto companies. It includes the Federal Reserve, which has been vastly increasing the money supply. It includes a federal government whose $787 billion economic stimulus has so far failed to lower the unemployment rate from where the government projected it would be without the stimulus package.

To govern is to choose, as John F. Kennedy said, and those in charge of these new centralized institutions are making choices that inevitably favor some and hurt others. Unsurprisingly, the politically well connected tend to get the favors. Banks forced to take government money are now blocked from paying it back and in the meantime must direct funds where the government wants them to go. Chrysler and General Motors bondholders have their property redistributed to the United Auto Workers retiree health care fund (how the retirees help the companies make cars profitably is left unclear). Stimulus funds go to state governments with lavish contracts with public employee unions. And out of every dollar that goes to a union, a certain number of cents make their way to the Democratic Party.

Defenders of these decisions might reply that if Republicans were running this system (as they were, at least in part, until Jan. 20) there would still be political favoritism, just with different favorites. But that’s the point. When government gets this intertwined with the private sector, when it makes decisions not based on neutral economic criteria but by what is at best guesswork about the allocation and valuation of vast amounts of capital, bailout favoritism and crony capitalism are inevitable.

Some will argue that it’s irresponsible to run against this new political center. Extraordinary steps were needed, they say, to deal with an extraordinary financial crisis, and anyway they were supported by a Republican administration. But it tells us something that the original TARP package was passed largely with the votes of those in both parties with safe seats and not in political peril, and that everyone is assuming that Congress won’t vote any more TARP money anytime soon. It tells us that the voting public doesn’t like this stuff.

It’s arguably good policy as well as good politics to run against this overpowerful center. Bailout favoritism and crony capitalism not only misallocate economic resources, they also sap faith in the fairness of our institutions. After World War II Democrats wanted to retain wartime high taxes, pro-union labor laws, and wage and price controls, all manipulatable for political benefit by political insiders. Republicans ran in 1946 on the theme of “Had enough?” and won big enough majorities to lower taxes, revise labor laws and abolish controls.

The 1946 Republicans didn’t move to the center. They ran against the power of the center, and permanently redefined where the center of the political spectrum was. That’s a path today’s Republicans might want to consider.